Entry of New Drugs and doctors' Prescriptions

Andrea Coscelli
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Andrea Coscelli: Lexecon Ltd

No 98/13, Royal Holloway, University of London: Discussion Papers in Economics from Department of Economics, Royal Holloway University of London

Abstract: This paper is about entry of new drugs in pharmaceutical markets. More specifically, I analyze the diffusion of new drugs among doctors. My empirical analysis uses non-parametric duration models, which are flexible enough to identify the most important covariates influencing the doctors' adoption decisions. My results peak to issues such as why generic drugs do not have large market shares in post-patent drug markets. When I analyze entry of bio-equivalent products, I find that the doctors' past dispersion across drugs in a therapeutic market is the best predictor of the likelihood of adoption. When a new presentation form is introduced by an incumbent firm, the doctors who extensively prescribed the brand in the other presentation forms are the ones most likely to adopt the new drug. Finally, I find that doctors are not firm-loyal in their prescribing behaviour across therapeutic markets.

JEL-codes: I10 L10 (search for similar items in EconPapers)
Pages: 44 pages
Date: 1996-03, Revised 1998-01
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